AVAIO Capital is a build-to-core infrastructure investment firm led by professionals from investment, development, engineering, construction, and operating backgrounds. AVAIO brings investment, development, and construction expertise to the creation and redevelopment of sustainable infrastructure assets throughout North America and Europe in four sectors: digital, water, energy transition, and transportation. Pulse 2.0 interviewed AVAIO Capital partner Mark McComisky to learn more about the firm.
Mark McComisky’s Background
What is McComisky’s background? McComisky said:
“As a company, AVAIO was founded in 2019 with the vision of bringing capital and expertise to the creation of new infrastructure projects like data centers. AVAIO was initially established as a division of a large engineering firm AECOM and later spun out to become an independent company owned by Anthony Gordon, Kevin Murphy, and myself (Mark McComiskey). The three of us have extensive experience in the power and energy sectors, giving us insights into developing power-intensive projects such as data centers.”
Formation Of AVAIO
How did the idea for AVAIO come together? McComisky shared:
“We saw a market opportunity: the need for a focus on creating new infrastructure supporting society’s sustainable growth has been discussed for decades, but to this day, very few investment firms are willing to fund new infrastructure. With our focus on three key sectors – digital infrastructure, energy transition, and water/environmental projects, we decided to form AVAIO Capital to address this gap in the market.”
“Specifically for digital infrastructure projects, we created a business called AVAIO Digital Partners. AVAIO Digital concentrates on developing large data center campuses as well as related telecom infrastructure like terrestrial fiber and satellite communications. Our collective background in energy and power gives us an advantage in identifying ideal locations for data centers with ample existing power sources, including access to sustainable and renewable energy supplies, as well as developing our own green energy supplies on-site.”
Core Products
What are the company’s core products and features? McComisky explained:
“AVAIO Digital’s core capability for data centers is identifying and securing attractive development sites before the market recognizes the potential of those locations. We take control of the land and then move the sites through permitting, utility interconnection, and other development work to have parcels ready for construction as customer demand arises. Our 40-plus cumulative years of energy experience helps pinpoint markets with affordable and available power, as well as access to future transmission and generation plans, providing us with unique knowledge and insights for navigating the competitive digital infrastructure market”
Challenges Faced
What challenges has McComisky and the team face in building the company?
“Securing enough power to meet the rapidly growing demand for data centers, and ensuring that this power is sustainable, is a huge challenge, as these facilities are incredibly power-hungry, and their energy needs are growing even more with the rise in AI demand.”
“The mismatch between the rapid timeframes at which digital businesses move and the more measured timelines on which utilities and regulators operate as they upgrade grids also creates friction. Regulatory constraints like data localization requirements further complicate the dynamics in the digital infrastructure sector.”
“However, the growth in digital traffic from cloud services, AI, and other emerging technologies presents an immense opportunity, and we’re uniquely positioned to provide the locations needed to support this growth in a timely manner.”
Evolution Of AVAIO
How has AVAIO evolved since launching in 2019? McComisky noted:
“When we launched AVAIO, industry participants were already talking about the rapid growth in demand. However, demand has expanded massively and continues to accelerate as digitization penetrates ever further into society, cloud services usage grows alongside, and AI becomes a major industry in its own right.”
“Wait times for a connection to the electricity grid in popular data center markets have risen from a year to 6 or more years, as have lead times for basic equipment needed for both data center and energy utility projects, such as transformers, switches, and generators. Finally, what customers are looking for in data centers has changed substantially, with a focus on much larger buildings in expandable campus settings with higher power densities – all changes that risk rendering older data centers obsolete while driving demand for new build facilities.”
“This has caused us to look at new geographic markets beyond the handful of traditional data center hubs and to focus on larger, campus projects in the multi-hundred megawatt range.”
Significant Milestones
What have been some of AVAIO’s most significant milestones? McComisky cited:
“Key milestones for AVAIO include buying out the company from AECOM in 2019, raising $750 million in equity from investors to fund our developments, and securing the first four major site locations in Arkansas, California, Madrid, and Virginia. Building out our team with experienced hires has also been significant for AVAIO.”
Funding
When asking McComisky about the firm’s funding metrics, he revealed:
“With the $750 million equity raise and additional project debt financing, AVAIO now has the capital to construct $3 billion worth of data centers across our portfolio of sites. This represents over 400 MW of potential capacity in our first wave of developments, and our developments are all expandable.”
Total Addressable Market
What total addressable market (TAM) size is the company pursuing? McComisky assessed:
“There are over 8,000 data center locations globally, with annual capital expenditure (CapEx) over $250 billion – that is a quarter trillion dollars, according to Analytica. And that number is forecast to grow substantially over the next five years. We are pursuing a share of that massive market.”
Differentiation From The Competition
What differentiates AVAIO from its competition? McComisky affirmed:
“There are several advantages. Our principals’ backgrounds spanning digital infrastructure, energy/power production, and investing allow us to take a more holistic view connecting data center demand with current and future power resources and grid capabilities. We have a strong belief in keeping an elite team of experienced professionals who can move quickly compared to larger organizations. Additionally, our focus on building entirely new, large-scale bespoke facilities positions us to meet customers’ needs in the current market without being burdened by legacy assets that are becoming obsolete.”
Future Goals
What are some of AVAIO’s future company goals? McComisky concluded:
“AVAIO’s near-term goals are focused on securing anchor tenant customers to activate our development pipeline and begin multiple site constructions. In the medium-term, we will incorporate renewable energy generation at some of our data center campuses as one component of our ‘green compute’ platform to maximize the sustainability of digital infrastructure.”
“We will also need to expand our team as more projects move into the construction and operational phases to handle the increased activity level.”
